Rationalise taxes

Nov 11, 2006, 01.05am IST

The FM's proposal to cut the tax rate has failed to cheer the lower middle class simply because in today's scenario they feel that their remaining the target for mopping up taxes is unjustified. While there are three slabs for the taxable income from Rs 1-3 lakh, there is only one slab for the income above Rs 3 lakh.

The rationality of this argument can be appreciated if one takes in to account the fact that most of the industry honchos have salary in the range from Rs 1-20 crore and there are lakhs of executives and government servants who are drawing salary more than Rs 3 lakh. Therefore, I suggest that there should be six slabs. First, 15% for income from Rs 3-5 lakh, second 30% from Rs 5-10 lakh, third, 35% for income from Rs 10-25 lakh, fourth 40% for income from Rs 25-50 lakh, fifth 50% for income from Rs 50-100 lakh and sixth 60% for income above Rs 1 crore.

Besides, the income-tax department today is so overloaded that it can't scrutinise the cases where income is much more than what is shown.